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James Co. decided to issue 100 bonds at 102. The bonds will include 10 warrants with each bond. On the issue date, the fair market
James Co. decided to issue 100 bonds at 102. The bonds will include 10 warrants with each bond. On the issue date, the fair market value (FMV) of each bond is 96, and the FMV of each warrant is $5. Each warrant allows the holder to purchase one share of $3 par stock for $25 per share. The James bonds will pay interest at 7 percent. Assuming that 400 warrants are exercised, the account Common stock warrants will be debited for_______. Hint: round the common stock warrants computation to the nearest dollar amount.
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